The Top E-Commerce Pitfalls and How to Avoid Them

By business.com editorial staff,
business.com writer
| Updated
Apr 14, 2020
Image Credit: Kerkez / Getty Images

Don't make these common mistakes when launching your online business.

  • Creating an e-commerce site comes with an array of innate challenges.
  • Some of the most common challenges facing e-commerce businesses are product obsessions, overstaffing, not using outside help, and more.
  • Other common pitfalls in setting up an e-commerce business are data security, shipping costs, return and exchange policies, website maintenance and online identity verification.

There's a lot to be wary of in setting up an online business. Just setting up a simple e-commerce website, hoping it will be flooded with customers and that your business will be a huge success is something of a pipe dream. Running an online business is certainly not a case of sitting back, relaxing and waiting for the dollars to come flowing in. It's just like running a brick-and-mortar business and requires a lot of specialist knowledge, as well as outside help, to make it a success.

 

Editor's note: Looking for an e-commerce website design service? Complete the questionnaire below to have our sister site BuyerZone connect you with vendors that can help.

 

 

Here are the top perils and pitfalls of online retailing and how you can avoid them when establishing your own e-store.

1. Product obsession

Many businesspeople who are selling online, as well as in the physical world, obsess about their products. While this is only natural, and you certainly want to offer the best you can, it's all too easy to get caught up in them. When running an online operation, I've found that it's essential to devote just as much time to the actual website itself. Just like a store you walk into, if an online shop is not attractive and doesn't function well, it won't matter how great your products are, visitors won't stick around long enough to see them.

2. Overstaffing

Personnel are expensive, and one of the key advantages of running an e-commerce site is that you don't need anywhere near as many employees as you would in the physical world – no cashiers, store clerks, customer care assistants, cleaners, security or any other kind of staff that drastically eat into profits. This is what allows online stores to have incredibly low overheads and, therefore, offer great prices to customers. Don't jeopardize this by thinking you need to hire lots of people for your site when you can really get away with the bare minimum and still become a sleek, efficient and highly profitable business.

3. Not using outside help

Just like with a physical retail business, you don't have to be an expert in every single aspect of running an online business. You will, of course, have your key expertise and critical passion for what you're doing, but you certainly can't be expected to know it all. The great thing about the digital era is that it opens up a whole world of online services for businesses – everything from accounting to search engine optimization – for an affordable cost that lets you focus on the most important thing: running your business. However, it pays to at least know something about the area you're outsourcing; otherwise, you won't really know what you're paying for or if the work is being done to a high standard. Make sure you do some research before you sign up.

4. Website maintenance

Just like a store in a busy town or city, a website needs a lot of care and attention if it's going to succeed and drive your business forward. Don't make the mistake of building a shiny new website and expecting it to stay shiny; websites, like physical stores, need constant polishing. This is especially true in the fast-paced digital world, where new web technologies are coming in all the time and the diktats of Google mean you have to make rapid changes or risk your business suffering.

5. Competitor analysis

Competitor analysis is a major issue for e-commerce businesses. Given that there are so many different e-commerce companies in existence, it can be very difficult to set yourself apart from the competition.

6. Customer loyalty

Another common issue is the matter of customer loyalty. Given that there is so much competition and the shopping is being done online, which often lacks the personal touch, it can be difficult to find and retain loyal customers.

9. Online identity verification

Given that all transactions are handled online, it can be difficult to tell if people were truly interested and if they are who they say they are.

10. Returns and refunds

Another major issue is dealing with returns and exchanges. In fact, studies have shown that 60% of online shoppers say that they are likely to abandon online carts due to return and exchange policies. Either way, shoppers are more likely to purchase things if they are confident in their ability to return and exchange things if necessary.

11. Shipping costs

Additionally, shipping costs can also deter potential customers. If costs are too high, consumers will either search for another vendor or try to find the product locally to avoid shipping costs altogether.

12. Data security

Another common issue for e-commerce companies is that of data security. Technical issues are quite common for online companies of every kind. However, these issues are magnified when they pertain to data security. Not only can this make for online attacks, but it can also put the sensitive data of your customers at risk.

Running an e-commerce site today requires a lot of focus, but there are big profits for those who give their sites the time and attention they deserve.

business.com editorial staff
business.com editorial staff
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